Amazon Cloud Cam and Key Will Disrupt Google, UPS, and FedEx

By Jim Lundy

(Aragon Research)– Amazon announced two new offerings yesterday: Amazon Cloud Cam and Amazon Key. Cloud Cam is a Nest-like home security camera that offers Cloud recording and can support up to ten cameras in one home. (For ten cameras, you need to pay $199 per year for the subscription.)

Amazon Key is a Service that allows third-party delivery firms (i.e., Amazon) to unlock your door and deliver a package. Amazon Key includes an Amazon Cloud Cam in the package. This blog discusses both offerings and the potential to disrupt Google, UPS, and FedEx.

Amazon Cloud Cam Disrupts Google Nest; Ring Still Wins On Price

The main way that Amazon is disrupting Google Nest is on price. Cloud Cam is $119 as compared to the base Google Nest at $199.

Other than price, both products are similar. Google wins on its portfolio of cameras, both internal and external. Is a lower price disruptive? For a 1080P camera, the answer is yes. The subscription is what you should pay attention to. Ring is the cheapest and it appears to be winning on price. Amazon’s subscription is sure to shift buyers away from Nest. So, for now, Nest, because of its 4K cameras, is the premium offering.

Firm/Offering

Premium Subscription

Amazon Cloud Cam

$199 per year

Google Nest Aware

$320 per year (per camera)

Ring

$100 per year

* Google offers discounts for multiple cameras.

Amazon Wants to Enter Your House with Google Key

Amazon Key allows Amazon delivery staff to unlock your door and deliver a package. It includes a Cloud Cam, so a homeowner can watch the delivery. This is a completely different approach than we’ve seen before—one could call it digital delivery—and Amazon is hoping people under 50 will trust them to offer a secure delivery. Our take is a locker would be better than allowing a third party into your house.

The reason for Amazon Key is due to theft. We have entered an era where leaving packages at your place of residence is risky. Amazon is trying to address the pervasive problem of package stealing with this creative, albeit unconventional, approach.

Disrupting UPS and FedEx

Amazon Key is a shot at the main delivery firms UPS and FedEx. This isn’t the first attempt at disruption, but it’s an effective one (UPS and FedEx shares both fell after the Amazon Key announcement). While there will be many people who will not sign up for this service, if Amazon can ensure security and that the locks cannot be hacked (our take is that they can be), then there will be a segment of buyers who will flock to this.

It’s clear that Amazon is trying to take them out of the delivery equation—with people now and later, with robotic delivery. UPS and FedEx need to respond to Amazon’s offering with a better solution. It may take a year, but they simply don’t have the option not to respond.

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